9911796707
TMI Blog2007 (1) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... fts made by her to her children and grandson. Subsequently, a revised return was filed by her declaring that there was no taxable gift, as what was effected through the settlement deed was only a family arrangement and hence, no gift-tax liability arose. The father of the assessee, by name, Dr. K. N. Kesari, possessed land and buildings and by a deed of settlement dated February 24, 1944, settled the same to the assessee reserving the life interest in favour of his wife, Mrs. Madhavi Amma. After the death of the assessee's mother, Mrs. Madhavi Amma, the assessee sold some of the properties and later, by a deed of settlement dated October 1, 1984, retaining 3/8ths share in the remaining properties, settled 5/8ths share in the said properties to her sons, daughters and grandson to the extent of 1/8th each. The assessee also filed a legal opinion given by Sri. K. Radhakrishnan, advocate, stating that the assessee's mother and the assessee were governed by the Madras Marumakkattayam Act, 1932 in respect of the immovable properties, that the assessee constituted a "tavazhi" and that the "tavazhi" could hold the property with all the incidents of the Marumakkattayam Act. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax levy. Exasperated with the said order of the Commissioner, the Revenue went on appeal before the Income-tax Appellate Tribunal. The Tribunal, by order dated April 17, 1995, confirmed the order of the Commissioner. The Tribunal held that if there is no contrary intention, that is to say, that if it is clearly not specified that it is not for the benefit of "tavazhi", section 48 of the Madras Marumakkattayam Act applies and the statutory presumption, viz., that it is for the benefit of the family, comes into operation and hence, the property bequeathed by Dr. Kesari to his daughter, the assessee, absolutely constituted a "tavazhi" and the Madras Marumakkattayam Act, 1932 is clearly applicable to the facts of the case. The Tribunal further held that even assuming but not admitting for a moment that there were no disputes regarding the property, the settlement deed executed by the assessee amounted to a bona fide family arrangement in view of the decision of the Supreme Court in the case of Maturi Pullaiah v. Maturi Narasimham, AIR 1966 SC 1836, wherein it has been held that conflict of legal claims either in praesenti or in future is not a necessary and essential condition for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e law relating to marriage, guardianship, intestate succession, family management and partition applicable to persons governed by the Marumakkattayam law of inheritance. The Act shall apply (a) to all Hindus in the State of Tamil Nadu who are governed by the Marumakkattayam law of inheritance; (b) to all Hindus outside the said State governed by the said law, in respect of properties within it ; and (c) to all Hindu males, whether governed by the said law or not, who have contracted or may contract marital alliances with Hindu females governed by the said law. Some of the relevant definitions in section 2 of the said Act are referred to as hereunder: "(i) 'tarwad' means the group of persons forming a joint family with community of property governed by the Marumakkattayam law of inheritance; (j)(i) 'tavazhi' used in relation to a female means the group of persons consisting of the female, her children and all her descendants in the female line; and (ii) 'tavazhi' used in relation to a male means the 'tavazhi' of the mother of that male." Admittedly, in the instant case, Dr. K. N. Kesari, the father of the assessee, was a brahmin and he married a lady governed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) when a gift is made to a wife and her children or to all the children or the entire group constituting the 'tavazhi', a presumption is drawn that the gift is for the 'tavazhi' ; and (iii) if the gift is to a wife or only to some of her children, there is no scope for invoking any presumption; but the question falls to be considered in each case on the facts whether the gift was intended for the 'tavazhi' or for the donees absolutely or for the donees as joint tenants. In the instant case, the assessee's father by way of a settlement deed dated February 24, 1944, settled his properties on the assessee reserving the life interest in favour of his wife, Mrs. Madhavi Amma. The relevant portions of the said settlement deed reads as follows: " . . . That the said K. Madhavi Amma, the first beneficiary herein shall have a life estate in the property hereby settled and more particularly referred to in the schedule attached hereto and she shall, during her life time, have sole control and possession of the property hereby settled and shall be exclusively entitled to all the rents and profits accruing therefrom. She shall have no power of sale or mortgage, or otherwise to alien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he members of the "tavazhi" could hold the property with all the incidents of the tarwad property, in view of the specific statement in the settlement deed, the third principle as laid down in Bhaskaran Thirumulpad v. Kavunni Thirumulpad [1967] 16 L. W 455 (Mad), would squarely apply to the case. That apart, since the gift by the father was not intended for the "tavazhi", the same qualifies the exclusionary clause as contemplated under section 48 of the Act, viz. ". . . unless a contrary intention appears from the will or deed of gift or purchase or from the conduct of the parties. . . " We are, therefore, of the confirmed opinion that in view of the exclusionary power given to the assessee by her father by way of a settlement deed, the presumption that the property bequeathed by the father of the assessee is a "tavazhi" property and hence, the members of the "tavazhi" can hold the property with all the incidents of a tarwad, cannot be drawn and as a result, the Marumakkattayam law of inheritance would not get attracted. Once we come to the conclusion that the property gifted to the assessee by her father by way of a settlement deed would not govern the Marumakkattayam law of i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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